ZTO Express (Cayman) Inc.

Good day and welcome to the ZTO Express second quarter financial results 2020 conference call and webcast. After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then 1 on your touch tone phone. To withdraw your question please press star then 2. We ask that all participants limit their questions to two per person, and if you have any further questions, you will need to rejoin the queue. Please note, this event has been recorded. I would now like to turn the conference over to Sophie Lee, IR Director, to read the safe harbour. Please go ahead, Sophie.

Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results in the investor relations presentation were released earlier today and are available on the company's IR website at ir.vto.com. On the call today from VTO are Mr. Mason Lai, Chairman and the Chief Executive Officer, and Ms. Kweiping Yan, Chief Financial Officer. Mr. Lai will give a brief overview of the company's business operations and highlights, followed by Ms. Yan. who will go through the financials and guidance. They will both be available to answer your questions during the Q&A session that follows. I remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Security Litigation Reform Act of 1995. Such statements are based on management's current expectations in the current market and operating conditions and relate to events that involve known or unknown risks, uncertainties, and other factors. all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statement. Further information regarding this and other risks, uncertainties, and factors is included in the company's filing with the U.S. Security and Exchange Commission. The company does not undertake any obligation to upgrade update any forward-looking statements as a result of new information, future events, or otherwise, except as required under law. It is now my pleasure to introduce Mr. Mason Lai. Mr. Lai will read through his prepared remarks in their entirety in Chinese before I translate for him in English.

大家好,感谢各位参加今天的电话会议。 2020年二次度, The epidemic situation in China is steadily stabilizing. The national economy and social consumption levels are recovering well. The business volume of the fast food industry increased by 57.4 billion in the same period as last year. With a 36.7% increase, we have refreshed the record of system business volume growth since 2017. This industry's leading enterprise has completed a business volume of 4.6 billion in total. Our market share has increased to 21.5%. At the same time, in the case of further expansion of our business volume, our service quality has maintained a stable and healthy state of mind. Second, we continued to increase the growth of the volume of business at the beginning of the year, and expanded the leading advantage and continued to increase the market share. In the case of further increase in market competition, we made adjustments to the network policy, including the currency balance mechanism, and increased the intensity to the end. Third, the price system of the two parties, and through central finance, provide some free funding for some of the endpoints. Although the competition is stressful, we work together with our partners to face the challenges ahead, and maintain confidence in the future, and maintain the stability of the network. At the same time, we are gradually implementing the work of reducing the cost-effectiveness, On the basis of a system, we have about 2,100 high-performance vehicles in our new headquarter, and about 500 rail lines and transport lines have been newly opened, which has greatly reduced the use of three-way traffic. The continuous expansion and greater scope of use of the automated division system has reduced our dependence on artificial labor. The operation management and process management have become more precise. For example, in terms of practical management, and heated up the process of focusing, scheduling, sorting, and assessment. This step has ensured the effectiveness and stability of the implementation. The cost of single-voting supply and division has also dropped by 11.17% and 17.1% to improve platform operation efficiency and gain room for market competition. Due to the high growth in the number of businesses that have been promoted internally, will lead to a drop in price and increase in cost-effectiveness. The second phase is that after 14.5 billion was adjusted, the net profit increased by 5.6%. In this competitive environment, we have achieved a balance of market share, service quality, and profit in three aspects. We believe that the Chinese express business has a good development prospects. From the front, the leading enterprise is still in a relatively poor market structure. Competition is something that can't be avoided. We have to focus on making ourselves bigger and stronger. We have to pull the distance so that wisdom can take the absolute advantage. In the next two to three years, the express delivery industry is likely to attract 300 million lines and even more hot business. 我们必须抬头放眼未来,低头深耕事做, 充分做好综合的准备工作。 接下来,我们仍然会为秩序围绕平台与网络 支出能力建设以及管理效能的提升 来落地以下制体的工作,以加强 On the one hand, we can increase our own production and investment. At the same time, through financial services, support and support, we can increase and accelerate the investment of infrastructure. On the other hand, we can further optimize the network structure to make it more flat and flexible, and reduce distribution times. continue to improve the efficiency of platform transportation. On the one hand, further optimize the configuration of transport resources. On the other hand, increase the self-development of distribution centers towards the direction of smart logistics ecotourism. 3. Enhance the last mile of multi-purpose food for couriers. On the one hand, further deepen the implementation of some of the staff's collection system. Develop the power of small power lines for self-management. On the other hand, we continue to advance the construction of the end-of-the-year station, which will further win competitive advantages in terms of express delivery cost, and reduce the distance between products and users, and accelerate the expansion of new products. For example, the power supply, the self-supply, and the oil and energy, etc. are designed to meet the individualized needs of users, or to meet the demand for specific storage and storage solution solutions. to upgrade products and create the corresponding operating capabilities to enhance the user experience and new knowledge. Enhance the network infrastructure capability, improve the efficiency of platform transfer, and strengthen the last 1 km of solar power and the expansion of new products are the core points from the leading advantage to the ecological advantage of ZTE. We have to rely on technology and information technology to make these mistakes effectively. While we ask our management team to achieve the target of the business, we also ask everyone to learn to understand the numbers and track the digitalized business process in the heat management process, to accurately calculate the stock price of the business, and to make the necessary decisions and adjustments. Product quality, market share, and profitability. Our current strategic focus, the improvement of the main business will become the world's first-class comprehensive logistics service supplier to build the Hucheng River for China. The construction and expansion of the ecosystem is the path for China to achieve its mission. As you can see, we have increased the forecast of annual business volume. We must do our best to achieve this goal. According to China's current volume, We believe that the Chinese express industry will continue to develop steadily. The President has firm confidence in his ability to seize the opportunity to run the express marathon. Thank you, Lai Zong. Now, please allow me to translate.